Erlotinib (Tarceva) is a selective small-molecule inhibitor of HER1/EGFR tyrosine kinases that is especially effective for treating non-small cell lung cancer (NSCLC) harboring a constitutively active EGFR mutation. Erlotinib treatment frequently induces adverse effects such as skin rashes and diarrhea, but severe toxicity is rare. Whereas interstitial pneumonia induced by erlotinib is sometimes observed, toxicity in the central nerve system (CNS) is rarely reported. Here, we report a 75-year-old female NSCLC patient who developed subacute encephalopathy during erlotinib treatment. She showed increased irritability, loss of consciousness, convulsions, confusion, lethargy, and urinary incontinence. A brain MRI and an analysis of her CSF and blood serum detected no other causes of encephalopathy such as brain metastasis, leptomeningeal carcinomatosis, metabolic disturbances, liver damage, or infectious disease. Her subacute encephalopathy was considered to have been induced by erlotinib because her symptoms improved rapidly and spontaneously after the cessation of erlotinib treatment.